Front Matter

Front Matter

Author(s):
David Robinson, Paul Cashin, and Ratna Sahay
Published Date:
September 2006
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    © 2006 International Monetary Fund

    Production: IMF, Multimedia Services Division, Creative Services

    Cover design: Noel Albizo

    Composition: Choon Lee

    Cataloging-in-Publication Data

    The Caribbean : from vulnerability to sustained growth / edited by Ratna Sahay, David O. Robinson, and Paul Cashin — Washington, [D.C.] : International Monetary Fund, 2006.

    p. cm.

    ISBN 1-58906-514-X

    Includes bibliographical references.

    1. Caribbean Area — Economic conditions 2. Fiscal policy — Caribbean Area. 3. Business cycles — Caribbean Area. 4. Natural disasters — Economic aspects — Caribbean Area. 5. Tourism — Caribbean Area. 6. Brain drain — Caribbean Area. I. Sahay, Ratna. II. Robinson, David O. III. Cashin, Paul. IV. International Monetary Fund.

    HC151.C27 2006

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    Foreword

    After gaining their political independence from the United Kingdom in the 1960s and 1970s, the open island economies of the Caribbean prospered initially because of the preferential access given their traditional agricultural products to European markets, and later due to the growing importance of tourism. The national authorities, rightfully, put a strong emphasis on improving social conditions, and today living standards have reached levels that match upper-middle-income countries. In addition, many economies such as those that are members of the Eastern Caribbean Currency Union (ECCU), and which are the focus of several chapters in this book, have enjoyed a sustained period of price and exchange rate stability. However, during the last decade the island economies have been buffeted by a series of adverse shocks, including the erosion of trade preferences, decline in official foreign assistance, and frequent natural disasters. The relaxation of fiscal stances, in many instances reflecting accommodation to these shocks, has led to a rapid build-up of public debt in the region.

    In response to the large macroeconomic challenges facing the Caribbean, the International Monetary Fund has stepped up its engagement in the region with the commencement of regional analysis and surveillance of the ECCU, intensified surveillance in Jamaica, more comprehensive Article IV consultations with individual countries, deeper technical assistance programs to help build local capacity, new IMF-supported programs in several countries (including Guyana, Grenada, and Dominica), and greater public outreach. The recent IMF-supported programs are developed by the authorities and embody a clear recognition of capacity constraints faced by many countries in implementing policies and undertaking reforms. In discussions with regional and national authorities, the IMF has emphasized that acceleration of the Caribbean’s growth performance will require a multifaceted strategy designed to integrate the island economies with the global economy, facilitate the transformation of their economies from agriculture into tourism and related services, promote greater regional cooperation, particularly in the provision of collective government services, and implement fiscal policies that preserve macroeconomic stability.

    The papers in this book arose from the IMF’s regional and bilateral surveillance work in the Caribbean and have benefited from discussions with key national and regional policymakers and feedback from regional conferences, seminars, and workshops. The papers set out many of the economic challenges facing the island economies of the Caribbean and present policy options designed to ameliorate external shocks and embark firmly on a sustained growth path. I hope that the contributions to this book will form the basis for deepening our policy dialogue in the region and help achieve the economic aspirations of the Caribbean people.

    Anoop Singh

    Director, Western Hemisphere Department

    International Monetary Fund

    Acknowledgments

    The authors would like to acknowledge the valuable comments and suggestions provided on earlier versions of the papers presented in this book by the authorities in the eastern Caribbean—particularly Sir K. Dwight Venner and his staff at the Eastern Caribbean Central Bank, and prime ministers and ministers of finance and their staff at the Ministries of Finance of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. The authors are also grateful for comments on previous versions from colleagues at the IMF—particularly Anoop Singh, José Fajgenbaum, Christopher Towe, Markus Rodlauer, Matthew Fisher, Sanjaya Panth—and from current and former IMF Executive Directors Jonathan Fried, Kevin Lynch, and their staff, as well as from Caribbean academics and policymakers at conferences and seminars held in the Caribbean. Thanks are due to Joan Hewitt, Cristina Barbosa, Kate Jonah, Joenn Khoo, and Joanna Meza-Cuadra for their support, and to Ping Wang and Cleary Haines for excellent research assistance. The authors would also like to thank David Einhorn and Jim McEuen of the IMF External Relations Department for editing the book for publication and coordinating its production.

    The views expressed in this book, as well as any errors of commission or omission, are the sole responsibility of the authors, and do not necessarily reflect the opinions of the Caribbean authorities, the Executive Directors of the IMF, or other members of IMF staff.

    About the Authors

    Paul Cashin, a national of Australia, is Deputy Division Chief in the Caribbean I Division of the IMF’s Western Hemisphere Department. Mr. Cashin holds a Bachelor of Commerce in Economics and a Master of Agricultural Science in Economics from the University of Melbourne in Australia, and a Ph.D. in Economics from Yale University. Prior to joining the Western Hemisphere Department, Mr. Cashin worked for several years in the Fund’s Research Department on issues related to developing countries; prior to joining the Fund he was Principal Research Economist at the Ministry of Agriculture in Victoria, Australia.

    Jingqing Chai, a national of People’s Republic of China, is an Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department. Ms. Chai holds a B.A. in International Finance from the East China Normal University in Shanghai, a M.A. in Economics from the University of Massachusetts, and a Ph.D. in Economics from Stanford University. Prior to joining the Western Hemisphere Department, Ms. Chai worked for several years in the Fund’s Monetary and Financial Systems Department on financial sector issues.

    Rupa Duttagupta, an Indian national, is an Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department. Ms. Duttagupta holds a Masters in Economics from the Delhi School of Economics, India, and a Ph.D. in Economics from the University of Maryland. Prior to joining the Western Hemisphere Department, she worked for three years in the Monetary and Financial Systems Department, and a year in the Fund’s Asia and Pacific Department. Her research interests include broad macroeconomic, trade and international finance issues related to developing countries.

    Pawel Dyczewski, an Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department, is a national of Poland. He holds a B.A. in Economics from the University of Chicago and a Ph.D. in Economics from the University of California, Berkeley. He joined the International Monetary Fund in 2002. Prior to joining the Western Hemisphere Department, Mr. Dyczewski worked in the European Department on the transition economies of Eastern Europe.

    Rishi Goyal, a national of India, is an Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department. Mr. Goyal holds a B.A. in Economics and Mathematics from Swarthmore College, and an M.A. and a Ph.D. in Economics from Stanford University. Prior to joining the Western Hemisphere Department, Mr. Goyal was in the Fund’s Economist Program working in the Middle East and Central Asia Department and the Monetary and Financial Systems Department.

    Prachi Mishra, a national of India, is an Economist in the Macroeconomic Studies Division of the IMF’s Research Department. Ms. Mishra holds a Masters in Economics from the Delhi School of Economics in India, and a Ph.D. in Economics from Columbia University. Ms. Mishra has worked on issues relating to international migration and trade; she also spent a year at the Fund as an intern in the Office of the then First Deputy Managing Director, Mr. Stanley Fischer.

    Montfort Mlachila, a national of Malawi, is an Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department. Mr. Mlachila graduated from the University of Grenoble in Econometrics and the Graduate School of the University of Auvergne Clermont-Ferr and, France, in Economics. Prior to joining the Western Hemisphere Department, he worked for several years in the Policy Development and Review Department; prior to joining the Fund, he worked at the Reserve Bank of Malawi.

    Patrick Njoroge, a Kenyan national, is a Senior Economist in the Caribbean I Division of the IMF’s Western Hemisphere Department. Mr. Njoroge holds B.A. and M.A. degrees in Economics from the University of Nairobi, Kenya, and a Ph.D. in Economics from Yale University. He has also worked in the Fund’s European II Department on the transition economies of Eastern Europe, and in the Policy Development and Review Department. Prior to joining the Fund, Mr. Njoroge worked for several years in the Ministries of Finance and Planning in Kenya.

    Ruby Randall, a national of Sierra Leone, is Senior Economist in the Office of Internal Audit and Inspection of the IMF’s Office of the Managing Director. Mrs. Randall holds a B.A. in Economics and Political Science from McGill University, a Master of Philosophy in Economic Development from Cambridge University, a Master of Science in Economics from the London School of Economics, and a Ph.D. in Economics from the University of Maryland. Prior to joining the Fund, Mrs. Randall worked at the McKinsey Global Institute. Mrs. Randall has previously worked in the Fund’s Western Hemisphere and African Departments.

    Tobias Rasmussen, a national of Denmark, is the IMF’s Resident Representative in Timor-Leste. Prior to this posting, he was an Economist in the Caribbean I Division of the Western Hemisphere Department, and he has also worked in the IMF’s European and Finance Departments. Mr. Rasmussen holds Bachelor, Master, and Ph.D. degrees in Economics from Aarhus University in Denmark, and a Master of International Affairs degree from Columbia University.

    David O. Robinson, a national of the United Kingdom, is Division Chief of the Caribbean I Division of the IMF’s Western Hemisphere Department, which covers the Eastern Caribbean Currency Union (ECCU). He currently leads the regional surveillance mission to the six Fund-member ECCU countries, and has also headed missions to Antigua and Barbuda, and St. Kitts and Nevis. Mr. Robinson holds a Ph.D. in Economics from Stanford University, a Master of Science in Economics and Econometrics from the University of Southampton, and a B.A. in Economics from the University of Cambridge. Prior to working on the Caribbean, Mr. Robinson worked for several years on the transition economies of the former Soviet Union.

    Ratna Sahay, an Indian national, is Senior Advisor in the IMF’s Finance Department. Previously Assistant Director in the IMF’s Western Hemisphere Department, she headed the regional surveillance mission to the six ECCU countries that are members of the IMF, and was responsible for regional initiatives in the wider Caribbean. Ms. Sahay holds a B.A. in Economics and an M.A. in Business Economics from Delhi University in India, and a Ph.D. in Economics from New York University. Ms. Sahay has written and published widely on international trade and finance and economic development, and has served as co-editor of IMF Staff Papers and Chair of the Working Group on Fund Research at the IMF.

    Wendell Samuel, a national of St. Vincent and the Grenadines, is Senior Economist in the Central American Division of the IMF’s Western Hemisphere Department. Mr. Samuel holds Bachelor and Master in Economics degrees from the University of the West Indies, and a Ph.D. in Economics from New York University. Prior to joining the Western Hemisphere Department, Mr. Samuel was Director of Research and Information at the Eastern Caribbean Central Bank, and a lecturer in the Department of Economics at the University of the West Indies.

    Guillermo Tolosa, an Uruguayan national, is an Economist in the Central American Division of the IMF’s Western Hemisphere Department. Mr. Tolosa holds a Bachelor in Economics degree from the University of the Republic of Uruguay, and an M.A and Ph.D. in Economics from the University of California, Los Angeles. Prior to joining the Fund, Mr. Tolosa was a researcher at CINVE, a Uruguayan think tank, and an Assistant Professor at the University of the Republic of Uruguay.

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